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Balance Sheet of Payal, Akeel and Ramesh as at 31st March, 2023 was as follows:

Liabilities Assets  

Creditors

Investments Fluctuation Reserve

Workmen Compensation Reserve

Profit and Loss A/c

Capital A/cs:

Payal

Akeel

Ramesh

2,00,000

2,000

18,000

3,000

51,000

40,000

40,000

Balance at Bank

Debtors

Less: PDD

Stock

Machinery

Investments

Building

Goodwill

30,000

1,600

1,60,000

28,400

4,000

29,000

30,000

1,00,000

3,000

  3,54,400     3,54,400

Ramesh retired on 1st April, 2023 and following adjustments were agreed upon:

(i) Building is to be appreciated by 10%.

(ii) All the Debtors were good.

(iii) Investments be valued 10% less than the book value

(iv) Stock be reduced to 93%.

(v) Goodwill be valued at one year’s purchase of the average profit of the past three years. Profits of the years ended 31st March, 2021 and 31st March, 2022 were ₹ 8,000 and ₹ 7,000 respectively.

(vi) Ramesh shall be paid ₹ 23,440 immediately and the balance in two equal yearly instalments together with interest @ 8% p.a.

(vii) New Ratio of Payal and Akeel would be 2 : 1.

Prepare Revaluation Account, Partner’s Capital Accounts, Ramesh’s Loan Account (till it is paid) and the Balance Sheet as at 1st April, 2023.

Anurag Pathak Changed status to publish March 3, 2024
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